JPMorgan turns in record profit, higher revenue
By CHRISTINA REXRODE The Associated Press October 12, 2012 6:30PM
FILE - In this Aug. 8, 2012, file photo, a banker walks past JPMorgan Chase offices in London. JPMorgan Chase, the country's biggest bank by assets, reported a record quarterly profit Friday, Oct. 12, 2012. The bank said it made $5.3 billion in earnings for common shareholders, a widely used measurement, from July through September, up 36 percent from the same period a year ago.(AP Photo/dapd,Timur Emek)
Updated: November 15, 2012 6:38AM
NEW YORK — JPMorgan Chase, the country’s biggest bank, reported a record quarterly profit Friday, helped by a surge in mortgage refinancing. CEO Jamie Dimon said he believed the housing market “has turned a corner.”
The bank made $5.3 billion, or $1.40 per share, from July through September, up 36 percent from the same period a year ago. Revenue rose 6 percent, to $25.9 billion.
Revenue from mortgage loans shot up 29 percent. About three-quarters of that was from people refinancing, rather than buying new homes. Low interest rates and government help encouraged homeowners to refinance.
Dimon noted that the bank still was seeing a high level of souring mortgage loans and said he expects high default-related expenses “for a while longer.” And he noted homeowners are still struggling under mortgages they can’t afford, saying the bank was working to modify those loans.
The bank gave few details on the surprise $6 billion trading loss that dominated its previous earnings report. It did mention that a credit portfolio moved to the investment bank from the chief investment office, which was responsible for the bad trade, “experienced a modest loss.”
The bank set aside an extra $684 million for legal expenses. Chief financial officer Doug Braunstein said the reserves were related to “a variety of issues,” and not just a lawsuit filed last week by the New York attorney general over mortgage-backed securities sold by Bear Stearns. JPMorgan bought Bear Stearns as it veered toward collapse in 2008.
Dimon said he couldn’t predict how much the bank would have to spend in the future.
Debit card revenue fell, which the bank attributed to new rules crimping the fees that banks charge stores whenever customers pay via debit card.